Market Rebounds, Will It Continue Amid Similar Patterns?
A-shares experienced a rise and subsequent decline, leaving a long upper shadow line, which has led many friends to worry whether the rebound has ended after just two days. Therefore, let's review the history of A-shares bottoming out and rebounding, and I have two experiences to share with you:
Firstly, A-share reversals often come with three consecutive days of gains. On the second day, there is usually a technical pullback during the trading session. Technically, this pullback occurs because the moving averages have not yet turned around. Psychologically, it is due to investors' lack of confidence, the bulls' indecision, and the inability to see the path ahead, leading to market fluctuations. However, after the pullback, if the market is indeed reversing, the third day should continue to see strong upward momentum. This is based on past experiences.
Secondly, in bull and bear markets, investors' emotional experiences are often opposite. In a bull market, investors have the urge to sell and realize profits, to trade in waves. In a bear market, investors always have the urge to keep buying more and increasing leverage. This is a common human nature. In reality, many people recognize the facts but miss the market trend. They know that once a trend is formed, it will continue, but they still cannot overcome the influence of emotions.
Therefore, in a bull market, it is common for investors to regret selling too early. In a bear market, it is also common for investors to cry out in despair after buying at the halfway point, regretting their initial decision. My advice is for investors to break free from the emotional norms of both bear and bull markets.
Advertisement
The strong rebound of A-shares has not yet ended, and with only two days of momentum, the road to a major bull market is still long. Many have endured years of a long bear market, yet some cannot resist the temptation of a 2-3 day rise, handing over their bloodied stocks and then missing out on the entire trend. As the saying goes, one wrong step leads to a series of mistakes. Faced with clear signs of a market bottom turning point, investors should be bolder and more patient at this time, not afraid to hold positions, and not afraid of short-term market fluctuations.
Roosevelt once said, "The only thing we have to fear is fear itself." Fear of rising and fear of falling are both driven by fear, and victory belongs to investors who can persist and have patience.
At the same time, to those who have missed out, I would say that right-side trading is also an option. Is a 10% rebound considered a high position? Are you afraid to get involved after a 10% rebound? Many people talk about real estate professionally, saying that you buy when prices are rising, not when they are falling, the same with Moutai liquor. But when it comes to the stock market, they start with "an excited heart and trembling hands," only feeling the urge but not taking action. Li Ao once said: "When you see a beautiful woman, don't be moved by your heart, but by actions beyond the heart." Similarly, in the stock market: when you see a bull market, don't be moved by your heart, you should take direct action.
Well, the above is to encourage everyone, to prevent you from jumping off the train when you shouldn't with the market, and to miss opportunities. Then let's return to the sectors.Currently, the major finance and real estate sectors are the main forces driving the market upward, but many people still have doubts about the future of the housing market. Some argue that China's housing market is now oversupplied, and people tend to buy when prices are rising rather than falling, fearing that it could lead to a "30-year housing slump" similar to what happened in Japan. Here are my thoughts: in the past, the benefits of China's housing market were "demographic dividend + urbanization." The demographic dividend refers to the fact that the population was young, and urbanization refers to farmers moving to cities because only urban housing in China could be bought and sold, leading to a supply of commercial housing that could not keep up with demand, causing prices to rise.
Now, the demographic dividend is fading, but there is still room for urbanization to strengthen. Let's first discuss why urbanization is necessary. It's simple: it's easier and more lucrative to make money in cities. Are there jobs in rural areas that offer a monthly salary of 5,000 yuan when cities offer 100,000 yuan? Allowing farmers the freedom to pursue wealth opportunities is a reason why China urgently needs to promote the urbanization process. On the other hand, only when farmers move to cities can those who stay in rural areas gain more land, thus achieving agricultural scaling.
Looking at the potential for urbanization, China still has more than 200 million farmers, while the United States has only 3 million agricultural households. Compared to the United States' urbanization rate of 83%, China still has more than 200 million farmers who want to move to cities. Moreover, people from small cities also want to move to large cities. The population of Tokyo accounts for 10% of Japan's total population, and the population of the Tokyo metropolitan area accounts for one-third of the total population. I calculated that the combined population of Beijing, Shanghai, Guangzhou, and Shenzhen is now 83.35 million, not including the Yangtze River Delta and Pearl River Delta urban agglomerations. If large cities were to account for 10% of the population, that would be 140 million, and there are still 60 million people who want to move to Beijing, Shanghai, Guangzhou, and Shenzhen.
In summary, the housing market is in a structural bull market, with a focus on large cities, especially Beijing, Shanghai, Guangzhou, and Shenzhen. The underlying logic is that China will continue to "re-urbanize." These cities need immigrants because they also face a decline in the demographic dividend. Immigrants can fill the labor gap in cities and create more wealth opportunities.